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CAMBODIA: Malaysian rubber firm has plans in Cambodia

"We are . . . consolidating by expanding into countries like Myanmar, Cambodia and Laos - planting other crops such as rubber, Sabri Ahmad, FGV Group president, said in a company statement.

According to FGV, a reason for the Cambodia expansion is that the country still has much land available; however, the company did not reveal any details on the size of the investment and plantations or when they plan to come in.

FGV's main business is palm oil, but in addition, the company also plants rubber and cocoa.

Srey Chanthy, a Cambodia-based independent agricultural analyst, said that one concern for newcomers in Cambodia could be that "recently the rubber prices have been going down a little bit.

However, he said that not only will demand still be there, but Cambodia still has room for potential expansion, citing the fertility of land for planting crops such as rubber.

He said the primary product from Cambodia is processed over the border in Vietnam before being exported to Cambodia's largest market, which is China. But "I wish these investors [in Cambodia's rubber sector] invest in [local] processing plants, said Chanty.

In China, a significant volume of rubber consumption is exported as rubber end products (tyres) to Europe or North America, according to Singapore-based International Rubber Study Group (IRSG).

FGV appears not to be the only Malaysian player interested in Cambodia's rubber sector.

In February, it was reported that the Rubber Industry Smallholders' Development Authority, which facilitates the Malaysian government's rubber-replanting program, was prepared to develop 20,000 hectares of rubber and oil-palm plantations in Cambodia, provided suitable land can be found.

Last month, it was reported that Cambodia's Prime Minister Hun Sen boasted that the country's rubber industry could soon overtake Vietnam.